I received a 1099 MISC for egg donations. Can that be categorized as "NO intent to earn money" as it was not actually a job and my intent was to help infertile couples?

[ChristinaR · Accepted solution]

Yes, you can indicate that the amount you received on the 1099-MISC stemmed from services that were performed without the intent to earn money. 

Please be aware that even if you do answer like that, it will still be included as income on your return.  This is because you did in fact receive a form of compensation, regardless of the underlying reason for your donation. Fortunately, answering in this way prevents self-employment tax from being assessed. 

In the recent tax case Perez v. Commissioner, 144 T.C. 4, (2015) in which an egg donor appealed taxes owed, the court held that amounts received absolutely represented taxable income.  From the ruling: 

“[C]ompensation for pain and suffering resulting from the consensual performance of a service contract is not “damages” under I.R.C. section 104(a)(2) and must be included in gross income...  This is all called egg “donation”, but the term is a misnomer– the participant in the egg-stimulation and retrieval is compensated."

[RawanH]

Hey- I'm in a similar situation but for tax year 2021. Did you end up owing at all, or did the IRS reach out asking you to pay the self-employment tax? I see that when I select it was NOT intended to be done for money, then it doesn't collect any taxes from me on it. Let me know!

[emf96]

Where did you find that option? I’m in a situation where I received a 1099MISC and can’t figure out where to report it because whenever I do, I owe double the amount of money than I did before I reported it. 

[lyndseync1]

I received a letter from the IRS for a donation from 2019 saying I over over $4k in taxes plus penalties. Is there a way to appeal these fees and change this to "no intent to earn money"?

[DaveF1006]

It depends. Was this reported as income from a 1099 MISC or was this a charitable donation that the IRS disallowed? if income, then you will need to amend your 2019 tax return and indicate in the return that this isn't an intent to earn money.